Buy-side identifies regulatory compliance as top priority

The plethora of impending regulation poses the greatest challenge to the global asset management community, according to a survey from trading technology provider Linedata.

The 2012 Global Asset Management Survey found 48% of asset management firms – comprising long-only asset managers, hedge funds and fund administrators – across the world believe new regulation is the main challenge for their firm, as the industry braces for sweeping new rules in the US and Europe that will affect multiple business areas.

Broken down further, the results illustrate a slight divergence across the different types of asset manager, with 59% of traditional long-only firms citing investment performance as their chief concern, with regulation second on 48%.

Respondents registered similar responses for future concerns, with regulation leading at 48% followed by maintaining investment performance at 46%. Again results for long-only firms skewed toward the latter, with 59%.

In addition to OTC derivatives reforms that are currently being implemented across the globe and will hike the costs of trading swaps, buy-side firms have a number of other regulations they will soon have to comply with. These include MiFID II, the Market Abuse Directive, the Alternative Investment Fund Managers Directive and the Retail Distribution Review.

Survey results were based on interviews and questionnaires completed by asset managers at a series of Linedata Exchange events in London, New York, Hong Kong and Singapore.

Respondents were comprised of 44% asset managers, 8% hedge fund managers, 11% fund administrators and 37% other stakeholders in the asset management. Geographically, 28% were North American based, 19% European, 37% United Kingdom and 16% across the remainder of the globe.